Corsicana Daily Sun, Corsicana, Texas

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July 27, 2013

Courthouse Restoration: Bond issue will include tax increase, advisor says

Corsicana — Navarro County taxpayers could see a small increase in property tax rates as part of a proposed bond issue.

Navarro County Commissioners received the first draft of a proposed bond package Friday that if approved would help pay the county’s share of a potential courthouse restoration.

Don Gonzales, financial advisor to the county for the bond package, outlined plans for a $6.5 million bond issue to present to voters in November.

Combined with a $4.4 million grant from the Texas Historical Commission, the courthouse will receive a three-year makeover should voters approve issuance of the bonds.

Grant and bond funds will pay a large portion of the costs, but some expenses will have to be rolled into the county’s general fund budget — including lease payments and the cost of moving in and out of the courthouse — expenses that will have an impact on the tax levy beginning next year, Gonzales told commissioners Friday.

The bond proposal, which Gonzales characterized as conservative, calls for an estimated increase in the current property tax rate of 1.82 cents in 2013-14, and another 1.09 cents in 2014-15, added to the current 62.70 cents per $100 in appraised value. That rate would fall by 1.7 cents in 2015-16, and by another .0003 cents in 2016, under the proposal Gonzales outlined. The increases are needed to cover the expense of moving everyone and everything out of the courthouse for three years, and then moving it all back, and to cover other expenses not eligible for grant or bond funds. An increase in the debt service beginning in 2014-15, should bonds be approved and issued, would go towards the new debt.

The 2013-14 tax increase of 1.82 cents would go toward costs not covered by either the state grant or bond proceeds, said County Judge H.M. Davenport Jr. But the commissioners still have to approve the new higher tax rate before the Nov. 5 bond election. Davenport said efforts were underway to obtain donations that might cover some or all of those first year costs, estimated by Gonzales to be around $460,000.

Should a tax increase be approved by commissioners, and the project not go forward, Davenport said the increase would go back to taxpayers when the court sets tax rates next year, according to information from the bond counsel.

Gonzales stressed the numbers were preliminary, and could change slightly with final calculations based on property values. He estimated an interest rate of 5.25 percent for the bonds, but if the county gets a better rate, it could impact the debt and the taxes to pay for the bond.

“No one likes to do a tax increase,” Gonzales said, “but when you look at alternative, the costs don’t go away.” If the voters reject the bond proposal and loses the state grant, it would bear the entire cost of fixing up the 100-year-old building, at a real cost of the county of far more than just its share of the restoration proposal.

Gonzales said the county would receive 68 cents in grant money for every $1 in the proposed bond issue. Without that grant money, the cost of financing a similar project would impact tax rates for 20 years, not just two.

“It makes a pretty compelling case, because with this, we get $4.4 million (of state grant money),” Gonzales said.

Lloyd Huffman with the Navarro Community Foundation, sitting in on Friday’s workshop, said the confluence of the grant, bond proposal package and timing of the project were positives.

“You’ve got a window now to act, if you’re ever going to do it,” Huffman said.

Davenport said the short term impact of a tax increase would be well worth the cost to get needed repairs done at the courthouse.

“It’s going to be a whole lot better to do this now with slight increases then drop back off,” Davenport said. “If we lose the grant, we lose $4.4 million, and we still have to come up at some point in time, if things continue to deteriorate we’re going to have to vacate the building.” Then, he said, the entire cost would be on the taxpayer.

“We have a window of opportunity right now, and I hope that voters realize that, that this is the time to do it,” Davenport added.

Still to be considered are additional personnel and capital expense needs with a temporary location for courthouse operations — including additional security personnel, and the added costs of transporting prisoners to court hearings. In a request outlined by Sheriff Elmer Tanner, additional manpower and a transport van would be required to bring prisoners to court hearings held in a temporary facility such as the Navarro Mall location now being planned. Presently, jailers walk inmates across the street from the jail to the courthouse, something Tanner said wasn’t possible at the proposed temporary location.

The Texas Historical Commission in Austin voted Thursday to take back the bond money if Navarro County voters reject the bond package Nov. 5, Davenport told commissioners Friday. Davenport went to Austin Thursday to explain the decision to change the restoration project from a Certificate of Obligation issue to a general bond election in November.

Also appearing at Friday’s workshop was Noel Valdez, bond counsel for the project, who outlined the timeline of a bond election, which must be called by commissioners no later than Aug. 26 to appear on the Nov. 5 ballot. Valdez said his firm would work with the county to supply the necessary documents, announcements and publications required by election law, including the production of Spanish-language materials.

Commissioners discussed producing a “fact sheet” on the bond proposal showing project costs and tax rate impact for distribution through the county website. Valdez also suggested special meetings and public forums to inform the public of the bond proposal elements and costs.

In a statement to commissioners at the outset of the workshop, resident Jackie King asked commissioners to consider having a structural analysis of the courthouse done prior to beginning any restoration work; a cut in county spending by 1 percent per year for the next 10 years; and limits on the amount of tax abatements granted.

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Bob Belcher may be reached by email at bbelcher@corsicanadailysun.com. Want to “Soundoff” on this story? Email: soundoff@corsicanadailysun.com

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